US boosts Fever-Tree H1 sales

Mixer producer Fever-Tree saw revenue rise by 9% in the first half of 2023, led by double-digit growth in the US.

Total revenue for the UK-based tonic and mixer producer rose to £175.6 million (US$219m) from January to June 2023.

Earning before interest, taxes, depreciation and amortisation (EBITDA) plunged by 53.5% to £10.2m (US$12.7m) due to ‘inflationary cost pressures’, in particular the effect of elevated glass pricing in 2023.

Fever-Tree saw revenue rise by 11% last year, however at the time the group said it expects to pay £20m (US$24.7m) in energy-related glass fees in 2023.

Sales by region

The US is now the biggest region by revenue for Fever-Tree, which saw sales soar by 40% to £56.1m (US$70m) over the six-month period.

In addition to a ‘strong’ on-trade performance in the US, Fever-Tree’s retail sales climbed by 23% year on year and by 200% over the last four years, compared to 2019.

Tim Warrillow, CEO of Fever-Tree, said: “We had a standout performance in the US where the brand continues to go from strength to strength, extending our leadership position in the tonic and ginger beer categories.

“This reflects how well established the brand is becoming in the world’s largest premium spirit market.”

UK sales were up by 1% to £53.8m (US$67m) with ‘flat’ growth in the on-trade after ‘tough comparators’ in the first quarter.

Fever-Tree now accounts for more than 90% of total premium mixer sales in the UK off-trade, the company noted.

The group said it had also achieved its highest market share by value in the UK.

Warrillow added: “Despite the challenging macro-economic conditions, we ended the first half with our highest ever value share of 45%, which is over 50% higher than our nearest competitor [Schweppes].”

Fever-Tree’s on-trade performance in the UK was more positive with the brand ‘outperforming’ the mixer market, growing its value share by more than 5% since 2019 to more than 53% in the channel.

The CEO also noted that the company’s new range of cocktail mixers and adult soft drinks have gained “significant and growing listings” in both the UK and the US.

The brand’s European business reported a 9% increase to £50.5m (US$63m) in the six-month period. Including sales from German distributor Global Drinks Partnership, which it acquired in July 2020, European revenue grew by 7%.

Fever-Tree said Italy and France continue to ‘outperform’ and the Nordics reported ‘good growth’.

In the rest-of-the-world region, sales plummeted by 36% to £9.6m (US$12m) due to a ‘one-off’ inventory buyback in Australia, after Fever-Tree established its own subsidiary and transitioned to a new distribution partner.

Fever-Tree claims to have a more than 80% value share of the premium mixer category in Australia’s retail sector.

The company has also secured a warehouse in Australia and will aim to start production with a local bottler during 2024.

Outlook for the year ahead

The group said it had made ‘good progress’ in glass supply for 2024 and is currently in the contracting phase for a UK/European glass tender.

Fever-Tree expects to deliver revenue of between £380m (US$473m) to £390m (US$486m) for the 2023 full year, driven by the US market.

Fever-Tree said its sales since the end of the period had been affected by ‘unseasonably poor weather’ in the UK over the summer.

The group is ‘comfortable with current market revenue growth rate expectations’ for 2024.

As such, Fever-Tree has estimated an improved EBITDA margin of approximately 15%, which is ‘ahead of current market expectations’.